Tesco to dump failed US venture Fresh & Easy

All companies make mistakes at some point and Fresh & Easy was a massive one for Tesco. So now Tesco is to close or offload (if it’s lucky) its West Coast convenience store venture: not just putting the patient out of its misery but shooting the doctor too, long-serving Tesco marketing boss Tim Mason who runs Fresh & Easy.

Mason, who is also deputy chief executive, follows his former boss Sir Terry Leahy into rather early retirement. Which leaves the floor clear for Leahy’s successor Phil Clarke, who is likely to be the first Tesco boss to declare a loss, unless someone comes in with a wholly improbable bid for Fresh & Easy which has so far lost about $2bn.

Fresh & Easy’s first problem was one of timing: it launched on the West Coast just when the US economy was going into meltdown because of the sub-prime loans scandal and consequent financial crisis. The crash in property values hit California harder than the rest of the US.

And the format was wrong, and the stuff might have been easy but it didn’t seem that fresh (everything originally was packaged up).

Anyway, the whole episode was a disaster. Tesco chose the convenience store format to avoid going head to head with Walmart and the other big store operators but all that’s happened is that, with Tesco’s UK business under pressure from Walmart-owned Asda (among others), the Bentonville boys are more in the acendant than ever, although they have their problems too.

Clarke (left) still has work to do to show that he’s the right man to lead Tesco back to its former glories.

About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.